Posted: Mon Aug 06, 2007 3:40 pm
Hi All,
first post here, but have sought lots of information by trawling the forum previously - thanks.
Myself and my husband - also business partners - both have an IVA, started June 2006. The assets in the Arrangement are £43,708 comprising of monthly contributions and £10,474 equity release. This produces a dividend to creditors of 21p in the £. Our arrangement is variable.
In August 2006 we managed to buy our business premises, this was allowed by the IP because we had an Option to Buy at a set price within the contract when we bought the business in 2003, and it was very cheap compared to 2006 market value, plus the mortgage worked out no more than what we were paying in rent.
We were told at the time of purchase that if we sold during the IVA, the equity would be classed as a windfall and payable to creditors - unless the equity was put back into our business, i.e. we couldnt gain personally from it.
A year later, we are struggling to make the IVA payments and fear bankruptcy,so have decided to sell the building pay off the IVA and some outstanding N.I. and be left with a moderate amount to act as a cushion in the business - cash flow so to speak.
We anticipated that if we offered the full £43,708 as F&F this would suffice, but I have today contacted our IP for 'where do we go from here' advice and she has told me it's not as straight forward as just paying off the £43,708, because the creditors will only be getting 21p in the £ and if they see you have more money available you may have to give it them all.
This makes our lifeline of selling the building not a lifeline and pointless. We will have business re-location costs etc to pay and will end up worse off if we dont have any collateral left.
Can anyone advise on this, I know it's a peculiar situation because of the collateral, but our business is struggling, we bought the building after the IVA as a safety net and doesnt seem entirely fair.
Appreciate your help.
Thanks
Tracie
first post here, but have sought lots of information by trawling the forum previously - thanks.
Myself and my husband - also business partners - both have an IVA, started June 2006. The assets in the Arrangement are £43,708 comprising of monthly contributions and £10,474 equity release. This produces a dividend to creditors of 21p in the £. Our arrangement is variable.
In August 2006 we managed to buy our business premises, this was allowed by the IP because we had an Option to Buy at a set price within the contract when we bought the business in 2003, and it was very cheap compared to 2006 market value, plus the mortgage worked out no more than what we were paying in rent.
We were told at the time of purchase that if we sold during the IVA, the equity would be classed as a windfall and payable to creditors - unless the equity was put back into our business, i.e. we couldnt gain personally from it.
A year later, we are struggling to make the IVA payments and fear bankruptcy,so have decided to sell the building pay off the IVA and some outstanding N.I. and be left with a moderate amount to act as a cushion in the business - cash flow so to speak.
We anticipated that if we offered the full £43,708 as F&F this would suffice, but I have today contacted our IP for 'where do we go from here' advice and she has told me it's not as straight forward as just paying off the £43,708, because the creditors will only be getting 21p in the £ and if they see you have more money available you may have to give it them all.
This makes our lifeline of selling the building not a lifeline and pointless. We will have business re-location costs etc to pay and will end up worse off if we dont have any collateral left.
Can anyone advise on this, I know it's a peculiar situation because of the collateral, but our business is struggling, we bought the building after the IVA as a safety net and doesnt seem entirely fair.
Appreciate your help.
Thanks
Tracie